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Business Interruption Insurance: Potential for Covid Claims


Many businesses have been interrupted by forced closures and supply chain issues caused from Covid19. Business Interruption Claims to date have not been accepted with Insurers stating the Covid19 Pandemic was excluded in their policy wordings, some of which contained reference to the Quarantine Act (1908) which was repealed in 2016 and replaced by the Biosecurity Act (2015). The High Court’s rejection of the application to appeal the judgement of the New South Wales (NSW) Court of Appeal in the first BI test case in Australia, which stated that references in insurance policies to a now-superseded Act of Parliament did not allow insurers to deny BI claims made because of the COVID-19 pandemic. The Insurance Council of Australia is urging small business owners to submit a Business Interruption (BI) claim through their broker or insurer if they believe their situation makes them eligible for a pay-out. There is a second test case that will determine the meaning of policy wordings around disease definition, COVID-19 outbreak proximity, the impact of government mandates, and other policy wording matters. Whilst the door is now ajar for BI claims that were originally rejected due to the application of the Quarantine Act (1908) there are still many other hurdles to be met before a claim can be paid. If you feel you have grounds to make BI claim you can lodge a claim by contacting our Claims Team here, claims@srggroup.com.au or your Client Manager.

To read more about the Business Interruption test cases click below.